The boxer Ricky Hatton has settled a £1.4m claim from his former trainer in an undisclosed out of court agreement.

The former light-welterweight world boxing champion was being sued by Billy Graham for money he claimed he was owed after being sacked in 2008. Both parties reached a "mutually acceptable" deal on the third day of a hearing at Manchester's civil justice centre.

Hatton, 32, who received an MBE three years ago, has not fought since May last year. Graham had claimed the Manchester boxer failed to pay him in relation to two fights, against Juan Lazcano and Floyd Mayweather.

After the hearing, Graham said he was happy with the outcome and keen to move on with his life.

Graham, 53, told the hearing that he had always received 10% of the purse in Hatton's fights. However, he claimed he was not paid for Hatton's fight against Lazcano at the City of Manchester stadium in May 2008, and that he was owed money for the clash with Mayweather in Las Vegas in December 2007.

Graham accused the boxer's father, Ray Hatton, of short-changing him by requesting he sign an agreement for a fixed amount of just over £451,000. This was despite a total purse for the Mayweather fight alone of more than £10m, after accounting for lucrative pay-per-view deals in the US and the UK.

The court heard Graham was Hatton's trainer between 1997 and 2008 and covered 45 fights, 22 of which were world title contests. "We were just totally on the same wavelength when it came to boxing," Hatton said of Graham.

Graham's barrister brought up a £30m counter-claim, which he said the boxer was pursuing against Graham following accusations of a poor training camp. Hatton said he was unaware of the counter-claim and that his father dealt with financial issues.

Earlier Graham said: "It was Ricky who I trusted. I always thought his dad would short-change me."

A joint statement released after the hearing said: "Billy Graham, Ricky Hatton and Punch Promotions Ltd have today agreed to put their differences behind them and have ended the court proceedings on mutually acceptable terms. Those terms shall remain confidential to the parties."